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The next 400 years of pubs

The future of Britain’s pubs is up for grabs after MPs voted to end the centuries-old tradition of the “beer tie”

When did the “beer tie” originate?

It goes back, in a handful of recorded cases, to the first half of the 17th century, when brewers began to enter into formal relationships with local inns and alehouses. A “tied” pub was one that only sold a local victualler’s beer, thus guaranteeing him a steady market. But the arrangement really took shape in 18th century London, where there were 5,000 pubs, one for every 25 residents. In that crowded, chaotic marketplace, “beer ties” usually arose out of distress. Then, as now, it was tough for publicans to prosper: most ended up in debt to the brewers who sold them their stock. In an era of nascent capitalism, brewers like Samuel Whitbread and Sampson Hanbury (of Truman’s) began to take on the debts, leases and mortgages of struggling publicans, in return for a captive market for their beer.

How did the tie work in practice?

In 1750, by way of example, Samuel Whitbread paid William Joslyn, a retiring publican of The Sun pub in Eagle Court, in Clerkenwell, £28 to obtain his lease. He paid another £12 for the pub’s furniture, then installed his own tenant, Paul Cockton, to run the new “tied” pub on a lease of £26 a year. Brewers were finding that if they controlled the debts of hundreds of pubs (by 1810, 256 of Whitbread’s 308 customers were “tied”), they could make their beer production more efficient: rationalising everything from buying hops to beer deliveries. For publicans, being backed by a brewery meant they had capital to fall back on to apply for licences and redevelop their premises, an increasingly costly business in the Victorian golden age of “Gin Palaces”. The “beer tie” was an early example of what’s now called vertical integration. Today, about a third of the UK’s 50,000 pubs operate under this arrangement. Last month, however, MPs voted to abolish it.

Why is that?

Because it has made the pub sector, a vulnerable mainstay of British life, “grotesquely anti-competitive”, says Greg Mulholland, the Lib Dem MP who tabled the motion. Most beer ties are exercised not by brewers but huge “pubcos”. Two of these, Enterprise Inns and Punch Taverns, own more than 10,000 pubs between them. In theory, they offer below-market leases or “dry rents”, in return for which landlords must buy virtually all their drinks through them as “wet rents”. In practice, say critics, a pubco rarely offers much of a rental discount, yet charges landlords exorbitant prices for the purchased stock. According to the Campaign for Real Ale (Camra), tied licensees pay up to £150 for an 11-gallon keg of Foster’s that would cost £84 on the open market. A 2011 study by the IPPR think tank found that tied publicans earn significantly less than non-tied counterparts: 46% earn less than £15,000 a year, compared to around 22% of those running free houses. That’s why beer ties in the US and Canada were abolished almost a century ago.

Is there any reason to keep them?

The pubcos – and some drinks market analysts – maintain that the beer tie is one of the only arrangements protecting pubs from annihilation. Pubcos and large, managed chains such as J.D. Wetherspoon, enable brewers to have large, guaranteed markets, so it’s argued. This keeps costs down and enables many “tied” pubs at the lower or “wet-led” end of the market (i.e. those relying mainly on the sale of booze) to stand on their own two feet. In the absence of the beer tie, pubcos warned, they will have to sell off hundreds of properties. Pubs are already closing at a rate of 31 a week, and the Government’s own figures have suggested that the end of the beer tie could lead to the closure of 1,400 more.

So why did the coalition push to end it?

Actually, it didn’t. The vote was a huge surprise. The coalition had argued for a far more moderate reform, but Mulholland’s motion, backed by Camra and a clutch of Tory MPs, carried the day. Many landlords were delighted. “We’ve been running this pub for eight years; if things had stayed the way they are, I do not think we’d have stayed longer than another year,” Jill Perkins, who runs The Jolly Brewer in Stamford, Lincolnshire, told the BBC after the vote. “People are going bust and being ripped off in ridiculous ways. These big pub companies just do as they please.”

How embattled are Britain’s pubs?

Slightly less than they were. In 2009, caught by the double blow of credit crunch and smoking ban, pubs were closing at a rate of 50 a week. But if the decline has slowed, pubs are still in the throes of much larger, long-drawn-out social and economic forces reflecting the way British people live, drink and socialise. There were 112,000 in 1870; 69,000 in 1980. There are some 50,000 today. “The main reason pubs are suffering is Xbox, broadband, plasma TVs and bookcases full of cookbooks,” beer writer Pete Brown told Esquire. “A hundred years back, you had to go to the pub on a cold night, as it was warmer than heating your home.”

Is there any hope for pubs?

Their history goes back 2,000 years, to the Roman invasion of AD43, when tabernae, selling wine, sprung up on the new roads to serve passing legionaries. In the course of two millennia, inns, taverns and alehouses have waxed and waned as a secular institution of British life, providing critical settings for literature (in Chaucer); subversion (Karl Marx is said to have written The Communist Manifesto at The Flask in Highgate); and science (Francis Crick celebrated the discovery of DNA at The Eagle in Cambridge). Practical hopes for the future of pubs rest on micro-breweries, restaurant-quality food and the eternal British requirement for alcohol in order to socialise. But pubs evolve and have always evolved (see box). As The Economist pointed out in 2010: “Pubs, despite a pickled tendency, are also mirrors of their times.” We get the pubs we deserve.

The (all new) Moon Under Water

One of George Orwell’s most beloved essays is an article he wrote for the London Evening Standard in 1946, evoking his ideal – and imaginary, pub – The Moon Under Water. “Everything has the solid, comfortable ugliness of the 19th century,” he wrote. “In winter there is generally a good fire burning in at least two of the bars, and the Victorian layout of the place gives one plenty of elbow-room... It is always quiet enough to talk. The house possesses neither a radio nor a piano, and even on Christmas Eve the singing that happens is of a decorous kind.”

What is striking, more than half a century later, is how contemporary some of Orwell’s tastes were: requests for “a good, solid lunch” and a garden with a play area for children, so that pubs can become “the family-gathering places that they ought to be”, are common-place. One pub chain more than any other has sought to realise Orwell’s fantasy: literally. J.D Wetherspoon boasts 14 Moon Under Waters in its portfolio of more than 900 pubs. The chain, much criticised in the past for its “soulless, big, cheap city-centre drinking pits” is now re-inventing itself as a home for newly fashionable craft beers, including Yeastie Boys from New Zealand, Nøgne Ø from Norway, and bespoke beers from the Sixpoint brewery in Brooklyn.

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